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Photo: Qilai Shen/Bloomberg via Getty Images

Tesla's quarterly results echoed what many other companies have been communicating in recent weeks.

Why it matters: The electric vehicle company has been one of the hottest growth stories of the last few years, with its stock decoupling from the rest of the market as it made shareholders and its CEO Elon Musk billions of dollars wealthier.

  • Despite its characteristics as a secular growth company, Tesla has delivered performance similar to more cyclical companies.

By the numbers: Tesla's record Q2 results included adjusted earnings of $1.45 per share, beating expectations for $0.94 per share. It joins the roughly 88% of companies that have beaten expectations so far.

  • The company cited “additional supply chain costs,” just like numerous other companies and execs sounding the alarm on inflation.
  • And yet, profit margins are expanding. Tesla reported an operating margin of 11.0% in Q2, up from 5.7% in the prior quarter and 5.4% last year. This is in line with a recent NABE survey that revealed widespread expectations for fatter margins despite higher costs.
  • Tesla’s inventory has gotten much tighter, shrinking to just nine days' worth of supply, down from 17 days of supply a year ago. Tight inventory levels have plagued industries ranging from housing to clothing to fast food.

Yes, but: Tesla’s got a massive amount of bitcoin on its books, and during the quarter, it reported a $23 million impairment charge due to its lower value.

  • There’s no disputing that this is an unusual item that you won’t see in most earnings announcements.

The bottom line: Investors seeking to spice up their portfolios with volatile growth plays like Tesla should understand that it’s not easy to find a stock that’s totally shielded from forces affecting all businesses.

Go deeper

Oct 25, 2021 - Economy & Business

Third-quarter earnings are on a roll

Expand chart
Data: FactSet; Chart: Thomas Oide/Axios

Investors heading into third-quarter earnings season were uneasy. And with good reason — if Q2 was marked by reopening euphoria, Q3 was marked by the Delta variant.

What’s happening: Companies are pretty much still killing it. There are exceptions of course — but with 23% of third-quarter S&P 500 reports in, the rare earnings misses so far are conspicuous.

Oct 25, 2021 - Technology

Facebook beats earnings, but misses on revenue

Photo illustration by Chesnot/Getty Images

Facebook's stock jumped marginally in after-hours trading Monday after the company beat Wall Street expectations on earnings per share but missed estimates on revenue.

Between the lines: Facebook warned investors last month that changes to Apple’s privacy rules would weigh on its business, and that warning helped the company dodge a big stock slide today.

Business leaders expect wages to keep going up

Expand chart
Data: NABE Business Conditions Survey; Chart: Thomas Oide/Axios

America’s business leaders expect to keep shelling out higher wages to employees.

Driving the news: According a new quarterly survey released today by the National Association for Business Economics, a record high 58% of respondents increased pay at their firms during the third quarter — and nearly the same share expects to do so again in the coming months.

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